Friday, 21 March 2014

Why no love for the coalition?

The coalition came into power during the worst recession that has ever happened. It inherited finances from a government who had spent more than all the previous post war governments put together.The banks were still tottering.The high streets deserted and job losses and inflation increasing.

Then the Euro zone started to collapse. The UK's largest trading partners could hide their recession no longer and they began to falter leading to the humiliating need to bail out entire countries.And if that wasn't enough North Africa and the Middle East went into revolution and Scotland decided it wanted a divorce.Any one of these events might have sunk a normal administration. All of them at once should have defeated the coalition utterly.When Jim Callaghan, faced with 1976 inflation and falling output from the factories was asked in cabinet what should they do, he suggested, only half jokingly, that they all emigrate.Yet the coalition has been a success.The inflation specter loomed only briefly. The rise of unemployment was halted well below the 4 million expectation. Borrowing, while desperate, was no worse than other nations. Civil unrest, after a flurry at the start, has been normal for Britain. The 'cuts' have been implemented and even some tax cuts have been made. And a very radical manifesto of benefits changes, education changes, dubious NHS changes, tuition changes and now pension changes implemented. More than labour attempted in 13 years never mind 4.Yet the coalition is very unpopular. Its unpopular here on this blog. I am unimpressed. CU has even gone over to UKIP.

Why is this so? What more could we realistically have expected them to do? I suspect that in the future, history will look more kindly on this period than we do today.

24 comments:

Sebastian Weetabix
said...

What cuts?

Government spending is higher this month than last month. Higher this year than last year. Higher in 2013 than in 2010.

Cuts, my arse. Osborne and friends have done absolutely fuck all to curb government spending. Our debt is astronomical and still climbing. Our energy policy is a mess. We remain enmeshed in the EU with zero effort at renegotiation; all we know is Dave et al want to stay in after this mythical renegotiation. Apart from that Dave screwed up in Libya and tried damned hard to fuck up in Syria. Now he seems to want war with Russia over Crimea.

Whatever you're smoking BQ, it's affecting your judgement. All we've had for the last 4 years is continuity Brown economics.

I agree BQ. I find it astonishing that Ed Miliband can criticise them for the levels of unemployment and 'cost of living' crisis - neither of which are anywhere near as bad as they should be after such high levels of mass immigration.

No-one can implement real austerity. Certain groups in the country would create merry hell. It will have to be imposed on us instead.

Those of us who dislike the Coalition do so because we know that there is no magic money tree.

You are right that the coalition has done well but it has failed on its central plank: to get spending down and the deficit closed. Its reforms have been weakened or abandoned for no good reason (see boundary reforms, healthcare for details).

I said at the start that Gove's reforms would be enough for me and I should stick to that. But what happened to the bonfire of the Bill Quangos, the reduction in the number of MPs, the great repeal of the thousands of criminal offences created by Labour, and so on?

For me this budget has redeemed the coalition a lot but why have they only done a non-Labour budget for the first time in the last year of the parliament?

Why have ministers been so poor at pinning the blame for the mess on Labour? How on Earth have they allowed dangerous Miliband to ride so high in the polls?

I will not be voting UKIP because I think they are unashamedly awful, I have been so disappointed with the coaliton that I had planned to abstain in 2015.

This is the Best administration this country has ever had (Honest John's blotted its copybook with the ERM debacle). We faced the spectre of mass unemployment, yet the worst the lefties can throw at the Tories is that some of them went to Eton. Britain is the fastest-growing major developed economy, and people are talking about a jobs "miracle" thanks to supply-side reform across multiple departments.

I think they faced a deep crisis but fudged it. We've seen mild cuts dragging on for years to come. They shifted the burden to experimental monetary policy.

If the problem pre-crisis was a public spending deficit, a housing bubble, low saving and an overbearing financial sector we've come out the other side with more of the same and in the case of debt, buckets more.

It's more like a crisis deferred rather than a crisis solved.

Meanwhile the cost of living "crisis" is real with prices ahead of wages. Ordinary people probably don't feel better off and their taxes are going up too.

Swiss Tax Exile you nail it for me. The real reason the Coalition is unpopular is that they have not made the cuts - I would have preferred more tax rises with deeper cuts even. That way the economy would be on the mend. If that had pushed us into a slower recovery that was what QE was for.

Instead, QE is wasted. Silly promises like no cuts to teh NHS and then reforming it anyway to lose the votes they were seeking is amateurish.

Finally, the killer for me is that the Tories have attacked their own base, middling to well off types who are hacked with every tax rise or 'benefit cut'. This has cost them support, then an over-bearing approach to the most vulnerable in society has meant they have no following amongst the public sector and tax credit classes they have been trying to appeal to.

So in all in, they get what they deserve. I note Labour for all their faults, do not try to court the rich and tory votes. They are happy with their base, lib dems and floating voters. I disagree with them but it is more honest. Cameron has proved to be the worst tyep fo tory leader, a wet who hates his own party and followers and is instead desperate to attack them to gain lefty votes.

Now we have a huge anti-business and anti-cuts feeling in the Country and that is mainly the Tories fault for not sticking to their guns.

SW: Only really disagree about Libya. I think Cameron handled it very well. Its not his fault if the Libyans don't want Democracy. The West's intervention was to prevent the massacre of Benghazi. DC did that without getting the UK involved in another Iraq. probably the best thing he has done.

On Syria, I am more in your camp. The essential lesson of Vietnam in the studies that the USA military commissioned was that you cannot pacify a nation that has powerful allies on their borders. Like Vietnam. Like Iraq. Like Syria. Egypt and Libya didn't have that advantage and so could have their weapons stocks isolated.

EK - agree. but like you I KNOW there is no money tree, yet am disappointed anyway. Is it because we still see stupid waste on carpets and oil paintings..Ministerial travel..Junkets and Jollys..council leader salaries going up whilst council employee numbers go down?

@BQ: I cannot agree with you re Libya. What we are seeing is essentially a Sunni/Shia civil war and Cameron decided to pitch in on the wrong side, ie Wahhabi nut jobs sponsored by the evil Saudis. The other side(s) are probably equally unpleasant but they do not seem to want to behead unbelievers in British streets. We should leave them all to get on with it. If they want to be martyrs let 'em.

Al-Muhajiroun types are always saying we should stay out of Muslim lands. I quite agree. When we do intervene it does no good and we get no credit.

Either way it's time we stopped pretending to be world policeman. We don't have the money, men, or equipment.

If there's something I find it hard to forgive the coalition for, it's this; the economic pain we've all suffered in recapitalising the banks will, it seems to me, be replayed sometime in the next few years because Osborne insists of encouraging house prices to rise for no better reason than it makes people feel better and there's an election coming. I may be entirely up a gum tree, or over-simplistic in the extreme, but I see little or nothing to fault in the following logic:

1. People continue to use low interest rates and artificial price inflation of housing as a reason to buy. They maximise mortgage borrowing in anticipation of capital gains on property, whether it's to buy bigger, change the car, or pay off a credit card.

2. When interest rates rise, the "poor hardworking families" of this country will be unable to pay their mortgages. House prices will fall, maybe not too far, but enough to make selling a no-no for many.

3. The cry will go up - "no one told me", "I didn't realise", "It's so unfair I'm forced to sell my house", "I have to choose between holidays and feeding my kids". Blood will flow down the streets of the nation and whichever lot are in power won't be able to afford to resist the impulse to Do Something.

4. Banks, faced with falling property values and increased arrears, will obliged to increase provisions massively and liquidity worries reappear. Confidence is knocked badly with effects on markets and investment.

5. To avoid being banished to the political wilderness for two generations or more as the Party that destroyed Middle Britain's homeowning ambitions, Government (whichever bunch of incompetents) will be obliged to come up with a fudge so people are spared the results of their own folly (again). The fudge has to be a means of removing the liquidity squeeze on the banks; or as we came to know it, "bailing out the banks at taxpayers' expense".

So we're doomed to repeat the cycle as before. Property's in a bigger bubble now than in 2007, personal indebtedness is higher than in 2007, and what was excoriated as the "criminal folly of bankers" just 5 years ago is now official Government policy. I agree with much of your thesis, BQ, but refusal to tackle the housing market is the tumour that's been negligently missed and will yet come back to get us all.

The coalition certainly has not helped the supply of housing much. Its bold scheme to get housing construction going was nixed by its own MPs: idiot rural tories and idiot green libs. Subsequently the coalition has tinkered but it should have done more. Liberal MPs should have realised from the start that this was their one shot at power in 30 years instead of worrying about their own personal re-election prospects. This is what happens when politics becomes a career choice rather than a vocation.

However I think the government has been right to pump up a boom with cheap money. A recovery cannot come as a result of deflation. Consumers drive recoveries not manufacturers, especially when your main export market is committing suicide. The rebalancing is coming as long as fiscal policy is kept so tight that interest rates can stay low for another 5-10 years.

My criticism of the coalition is that it has not gone far enough, not that it is going too far.

BE; I should have mentioned another big problem for the coalition. That is that they are a coalition. Not even a coalition of fellow Barons but of rival Lords.

So .. it was going to be harder still. The saddest part is they started very well. Unity awith a determination to make coalition work. Unfortunately the idiotic tuition fee pledge caused such massive electoral damage to the Liberals it meant they pretty much had to behave like far lefties to keep any vote at all.

It was the steady drip of further nonsense that caused faith to fail. A U-turn a week. Forest sell offs. Aircraft carrier indecision.Cuts to the forces whilst planning wars. Cuts to the police during time of riots. It looked all a bit unplanned i think.

Jackart.Not the best government ever. But the challenges faced were and still are enourmous. And I do believe that future politics students will consider that the Coalition did much better than say the Labour or Tory 1930's governments.

But they are unpopular. They are not winning in the polls. They are not going to get another term.

One thing we haven't addressed is that the rise of UKIP is almost solely down to the social democratic nature of the coalition. Cameron is not trusted to deliver on his promises.That is his own fault. And he did precious little to appease his own party or stop the discontent in the ranks.

I believe, as have written before, a lot of this is down toA} The ChumocracyB} The LiberalsC} The pre-crash policy of trying to out Labour, New-LabourD} The lack of a first class strategist and shark like Crosby.

Why are they unpopular? More of the same Crony-Corporatism, but the real thhing that stick in the craw is that they have betrayed trust in almost every area: fiscal policy, law and order, foreign policy, EU, social policy.Oh and the fact they have no real mandate from anyone.

BQ my point was that having got into Parliament LD MPs should have made the most of their one term in office to do some actual liberaling, instead of spending their one term in office to prevent all the liberal policies that the coalition decided to do. The liberals have betrayed *themselves*. Their active resistance to reform is not a result of tuition fees or riots it is a result of them being scared of the 2015 election.

The Liberals could have got to the end of this parliament with a good legacy. Instead they will be remembered for being so crap that Labour got straight back in after bankrupting the country.

- Hunting, obv - 'Localism Lite', turns out this lot are just the same Big State corporatists as all the others. The biggest obstacle to real cuts in public expenditure is their own refusal to devolve functions- No action to take out the fake charities; they're just as useful to Cameron as they were to Labour- Leaving the door open to State funding (tax funding that is) of the old, dying parties, antidemocratic and anathema to so many of us- A continuation of Labour's culture of managerialism that crowds out true open market competition-Crony corporatism as has been mentioned elsewhere; a betrayal of the Thatcherite links with the ideas of the ASI / IEA - Cameron's administration would be as loathed by Ralph Harris as any Labour government

Then of course there's the problem that absolutely no-one trusts them on anything.

Swiss tax and CU - It is a crisis deferred. Not sure there was a lot of alternatives though. people were and still are not ready for cuts. I'm not!

On this blog we did urge GO and DC to get on with it. To cut early and deep and take the pain in the first year and try to recover in the following. But for unexplained reasons the c gov decided to take a year off.

this was doubly bad as they had a year of negative publicity without making a single £ of spending cuts.

Jer : Never too late!Cameron is hard to like but has the highest approval ratings of any of the leaders. Go figure? its because he is seen as competent. With the whole pasty fiasco he lost that and lost a year of good will.not being Tory enough has hurt him. But his own backbenchers haven't really helped him either. And for the Liberals they wanted AV. Permanent Libs in power. They were shocked when 99.9% of the population disagreed and they blamed the Tories for not giving it to them.From then on, a lot more politicking and a lot less Government of national unity.

FormerTory - A well set out position and I think partly correct. But when i suggested in 2009 that now was the time to rebalance the economy it was explained to me why the policy of both labour of tory was to continue with banking.

It would take 20 years to build a manufacturing industry 1/4 the take of financial. It would take 10 years to build a high tech/film/internet/digital industry that took in a 1/4 of financial.

neither sectors would be guaranteed to succeed and could easily become another British Leyland.

But the banks could {the theory went} be back in action in 3 years, back in private hands in 5 and making money for the treasury in 7.

Its a catch 22. We cannot reform our housing/banking/service economywhen its broken. And when its not broken, we don't need to fix it.

I see that the US is desperately trying to divert attention away from the cockpit failure in that Boeing 777. “Oh no, couldn’t possibly be a fire or electrical failure – could only have been a terrorist or a hi-jacking”.

Far be it from me to suggest that the US are merely covering up for their largest exporter. The Boeing 777 is a “fly-by-wire” aircraft, so a failure in its cockpit electrical systems would render it impossible to fly. We know the Rolls Royce engines were working fine because the plane was still flying for 6 or more hours. We know the airframe was intact – so no bomb went off. We know the pilots tried to return the plane to Kuala Lumpur. But after that nobody at all was in control of the plane. It just flew by itself for hours until it ran out of fuel and fell into the sea. The debris that has been spotted is exactly 6 hours flight away from Kuala Lumpur 180degrees in the opposite direction to the original Kuala Lumpur to Beijing flightpath. Why would a hijacker take a plane across the Indian Ocean and crash it into the sea 1000′s of miles from nowhere? Why would a suicidal pilot crash the plane 1000′s of miles from anywhere and why would the co-pilot let him? No, it is simply a failure of yet another Boeing aircraft. The pilots did their best to save the situation but either were incapacitated or the plane itself was incapacitated.

Fact is that the US doesn’t want this plane found. They want it to sink with its dirty little secret. The US has a big airbase at Diego Garcia and plenty of long-range aircraft that could be scouring the area for wreckage. They have given just one aircraft to the search. They know if the search carries on long enough the batteries in the black box recorder will die and then the plane will never be found. The US probably knows exactly where the plane is. They don’t want this coming back on Boeing. Do a little research on Boeing and you’ll find out just how corrupt it is and how many links it has into the US government.

One more thing. Don’t ever fly to Kuala Lumpur. It seems if an unmarked Boeing 777 flies through their airspace right over their main airport they won’t even notice it. You do have to wonder what their air-traffic controllers are like.